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Every industry values links a little differently. Thanks to great tools like Ahrefs and SEMRush that exist today, we can actually apply dollar signs to the value of links to determine if link building makes sense for us, and also get buy-in for our content marketing projects.

In today’s video, I break down the exact process we use for making an argument that links matter. Ironically we sometimes use the same analysis to understand when a client won’t see ROI from our efforts and therefore, won’t be a great long-term fit.

You can use the same analysis to justify link acquisition at your company or otherwise, understand when you may be paying for link building at a negative ROI.

NOTE: We use the phrase “links” in some of these equations, but when we do we mean linking root domains, not links in total given diminishing returns from links from the same domain.

Video Transcription

Hey everyone, I’m Ross Hudgens, founder of Siege Media, and today I want to tell you how to evaluate how valuable links are in your market.

One of the things I do in a new client process is to look at one, how many links they need, and two, what the value is of those links that they can acquire. Thankfully, with tools like Ahrefs and SEMRush, it’s relatively easy to do this analysis today and at least directionally be accurate as to the value of those links for your website.

This of course is a very valuable thing to know, besides just saying links are a ranking factor. Putting an actual quantifiable value that ties to the dollar signs will allow you to put some math behind something when someone needs to sign a check for this thing, or you need to get something done internally.

Obviously it’s a lot easier to do so when you can actually tie it to numbers that have value in some way. And of course, if we believe that links are a ranking factor, it’s relatively simple to do that.

One way we can start this analysis is using a good chart I saw from Kevin Indig, who was just on our “Content and Conversation” series. He shows how important each thing is in terms of the main SEO elements for each startup.

That would be links, technical, and content, and for some businesses, it’s high, links are high. For other businesses, it’s quite low.

The reason that is for networks like Facebook and Pinterest is because they can generate a huge number of links just by nature of who they are.

For those kind of businesses, it’s not that links don’t matter less, though. It’s just the nature of the market that means links are easier for them to generate, therefore they wouldn’t go to an agency like us or hire an internal link builder, because the links are being generated at such high volume without it.

For them, things like technical are of higher importance, just because of the nature of their business. Of course, this varies by business type, and for some businesses, it’s actually the opposite of that spectrum. So we can think about this using tools like Ahrefs and SEMrush to look at each market and evaluate how potent or valuable links might be to them.

If we start with Facebook, we can actually see that yes, they have a traffic value according to Ahrefs of $1,300,000,000.

That’s obviously a ton. But if you actually do the math the numbers aren’t quite as impressive. What I suggest doing is taking their estimated traffic, and then divide it by the number of referring domains that they have.

So for them, it’s $1,300,000,000 in traffic value. You divide that by 24,700,000 referring domains, and you get a per-link value for them.

This makes sense, because if we think a link has a quantitative value, and then their traffic value is Y, we do this math, and you can come to an approximate per-month value from a cash perspective.

For them, we can then do this math. It’s $1,300,000,000 billion divided by 24,700,000 referring domains, and we actually get to a per-LRD value of only $52 for Facebook.

If you think about that in the grand scheme of things, even though they have 24,000,0000 links, their value on a per-month basis is only $52.

For the markets I look at, that is actually on the very low side for a business, and that backs up that thought process by Kevin Indig that we saw earlier. For a social network like them, they’re generating so many links that their per-link value isn’t very high.

If we look on the opposite side of the spectrum we can find a business like CardRatings.com. They do credit card reviews and aren’t a giant brand like Facebook, so it’s gonna be difficult for them to attract links. At the same time though they’re reviewing credit cards, so therefore their traffic or potential traffic value is quite valuable.

If we look at their math, we can actually see that they have 1,460 referring domains and their traffic value is $2,700,000 per month. So if we do that same division of $2,700,000 divided by 1,460 links, we now get to a per-link value of $1,849 per month.

Compare that from Facebook to CardRatings, we get $1,849 for CardRatings per month, and only $52 for Facebook. You can see this dramatic spectrum at play here, which obviously would mean for CardRatings, the value of an extra link for them, one, will yes, be a lot harder for them to generate, but also a lot more high.

Now we take that further, because you are selling yourself short if you’re only valuing links on a per-month basis. I believe a good link that is generated on a high-quality website, on average might stay around for about 24 months.

There are some studies that say that link ghosts exist, and if you have a link and even if it falls off, you retain that value, but overall, I like communicating that the value of our link will really be for 24 months or so on the low side.

For CardRatings, we can do this math and take their link value of $1,849 and multiply that by 24 months. That gets you a very high number… a lifetime link value of $44,376.

If you just do a very basic ROI equation, and this is why people get so excited about links, if if you see your per-link value is $44,376 and your cost to generate that link is somewhere between $500 to $1000, or maybe it’s even higher on average, obviously that’s still massive ROI for that effort.

Of course though, your traffic value can’t be purely attributed to links.

There are multiple ranking factors, but even if we’re directionally accurate that links are worth this amount, and we were fair about that and we say it up front, like, of course, you have to be lined up technically and with on-page SEO as well in order to realize this ROI, then the numbers come back reasonably. Even given that, if you’re generating a per-link value of $44,376, it’s a very straightforward equation to be investing in link building in some way.

Hopefully this analysis will allow you to look at your own market, understand where your competitors are, what the value is, and what an extra link or two, or maybe a hundred, might do in terms of increasing the ROI and the bottom line for your business. You can apply this formula to better understand your own competitive dynamics as well.

If you like this video, and you’re curious about this for your own market, feel free to comment your own website, and if it’s confusing to you, I’d be happy to do this analysis for you and tell you your per-link value. But regardless, we’d love any other feedback. Give it a thumbs up, subscribe, and let us know what you thought in the comments.

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Comments

  • Interesting post Ross. So, from an agency perspective, how would you approach charging for a strict link building campaign (not considering the other traffic variables)? For the CardRatings example at $1,849/link, do you also adjust your billing rate for the services based on how much value links have? Or, would you suggest just keeping in mind what it costs the agency itself to produce a link, and use these metrics to show value and ROI potential?

    • Hey Daniel, in general I’d probably keep the costs the same. I think it tends to be more expensive/harder to generate links in markets like CardRatings with a higher value per link — there’s a reason it’s so high, because links are hard to come by. If that’s true and you charge on a per link system, then I’d increase prices simply because that’s what’s required to stay profitable. That said, you could potentially increase prices based on this but you run the risk of a competitor charging market rates w/o factoring this in and undercutting you.

      • Thanks for the response and the offline email. Regardless of how my, or other, agencies use this info, it is valuable to know what links are worth in a specific vertical. Great insight!

  • Site like FB gets direct traffic & free promotion from press & media, so it’s $52 is justified for sites like this.